70% of families are paying rates the
government defines as unaffordable. And nearly half of families
spend 15% or more of household income on care.
Cost of care increased last year for
two-thirds of families, and rising costs are having a significant
impact on families, employers, and the economy.
According to the Care.com 2019 Cost of Care survey, American
families are cutting back substantially on other expenses in order
to be able to afford child care costs, which are taking an
increasing share of household budgets.
The sixth annual Cost of Care survey from Care.com (NYSE: CRCM),
the world’s largest online destination for finding and managing
family care, found nearly half of families spend 15% or more of
their annual household income on child care. For the second
consecutive year, the survey found more than 70% of families
reported paying 10% or more of their income on care. (The U.S.
Department of Health and Human Services’ (DHHS) definition of
affordable care is 7%.) And two-thirds of parents say they’re
spending more on child care than they did last year.
The survey also asked parents how they’re responding to the
rising cost of child care. In addition to financial strain, child
care costs have caused relationship tension for 36% of those
surveyed; 39% said care costs have impacted family planning; and
39% said they waited longer to have children or had fewer children
than they would have liked because of the high cost of care.
The results demonstrate the central role care plays in our
economy. The good news is that more families are budgeting for
child care: 84%, up from 68% last year and from 54% five years ago.
But that positive trend masks a deepening crisis: While 70% of
families say they’re able to afford their current care arrangement,
the details of how they make it work tell a more complicated story.
To cope with the high cost of care, American families told Care.com
they are sacrificing elsewhere by spending less, saving less,
paying off less debt, and even taking on additional debt.
This new data helps illuminate why child care is taking center
stage in American politics and policy. Last year, Care.com Cost of
Care data was cited on the floor of the House of Representatives,
and lawmakers from both parties have recently unveiled ambitious
new proposals to help fix America’s broken child care system.
Measuring the impact of child care costs on families, businesses,
and the economy is a key first step to solving America’s care
crisis.
“Care.com’s data clearly shows a fact that’s often overlooked:
Care is a driving force in our economy. The cost of child care has
tripled since 1990, rising far faster than inflation, and becoming
the biggest household budget item for many families – and families
just can’t keep up,” says Sheila Lirio Marcelo, Founder, Chairwoman
and CEO of Care.com. “Parents are under more pressure than ever to
find reliable, affordable child care, but our current system is
literally pushing parents out of the workforce and families out of
the Middle Class. From all around the country we’ve heard stories
of families struggling to find quality care they can afford. We
simply can’t afford to continue to dismiss care as a ‘soft’ issue
or a ‘women’s’ issue. As a society we need innovative, scalable
solutions to our care crisis.”
2019 COST OF CARE AROUND THE
COUNTRY
*National Average Weekly Rates
2018
2017
2016
2015
2014
2013
Nanny
$596
$580
$565
$557
$477
$472
After-School
$244
$242
$232
$214
$197
$181
Child Care Center
$213
$211
$211
$196
$188
$186
Family Care Center
$199
$195
$200
$181
$140
$127
Au Pair
$390
$390
$367
$360
$360
$360
*all rates are for one infant child, except for After-School
Sitter, which is not age limited.
**Top Five Most Affordable States to Hire a Nanny:
- New Jersey
- Maryland
- Connecticut
- New Hampshire
- Minnesota
**Top Five Most Affordable States to Use a Child Care
Center
- North Dakota
- Utah
- Delaware
- New Jersey
- South Dakota
**Top Five Least Affordable States to Hire a Nanny
- New Mexico
- Mississippi
- Arkansas
- Alabama
- Florida
**Top Five Least Affordable States to Use a Child Care
Center
- District of Columbia
- California
- Oregon
- New Mexico
- New York
**Based on the average cost of care in relation to the state
median family income among households with children.
CARE.COM 2019 COST OF
CARE SURVEY INSIGHTS
What’s the impact on working parents?
Rising child care costs are surprising parents. A full 70% of
respondents said child care costs were the #1 cost that surprised
them when starting a family. Parents were also surprised by the
interdependency between care and work.
Two-thirds of parents said that, prior to having children, they
did not expect the cost of child care would influence their career
decisions. Yet, nearly the same share of respondents, 63%, said
they made career/workplace changes in order to afford child care.
Moms especially felt the impact of care challenges on their
careers. Common career moves included changing jobs for higher pay
(38%) or asking for a more flexible schedule (36%). In total, more
than half of moms scaled back their hours to save on child care,
and 25% left the workforce altogether. And 22% of parents said they
later felt regret over the concessions they made in their careers
to take on unpaid care responsibilities.
Child care has also had a more direct effect on parents in the
workplace with 74% of moms and 66% of dads saying their workdays
have been impacted because child care fell through at the last
minute. In those situations, 70% have used sick days and more than
half (56%) have come in late; one in three moms has lost a day’s
pay, while one in four brought their child to work. Recent analysis
by ReadyNation estimates productivity problems due to child care
challenges cost employers $12.7 billion annually.
Still, only about half of parents surveyed (48%) say their
employer seems to care about their child care needs. Just 15% of
working parents say their employer offers benefits like backup
child care – but 86% say they wish they did. Those percentages are
consistent with the availability of employer-provided care benefits
in the marketplace. According to the most recent National Study of
Employers, just 7% of companies provide child care at or near the
worksite and only 5% offer backup care for employees when their
regular care arrangements fall apart. While still in the minority,
businesses who have begun offering care benefits have found
investing in care gives them a competitive advantage.
“The challenge of finding reliable, affordable care isn’t just a
problem for parents; there’s a snowball effect that also impacts
their employers. But sick kids and school holidays shouldn’t mean
parents miss the big meeting, that important deadline or are unable
to pay their rent,” says Alyssa Johnson, VP of Global Account
Management for Care@Work by Care.com. “When a company works to be a
part of the solution, it’s good for their people, their brand and
their bottom line. And we’re seeing more and more step up,
especially in this tight labor market when there’s such a premium
on talent.”
What’s the financial and familial impact of child care
costs?
Although most families are spending well over the DHHS
affordability threshold, 70% of respondents said they’re able to
afford their current child care plan. But how are families making
ends meet? An all-time high cohort of parents, 84%, said they
budget for child care. By that, it turns out, they mean they’re
spending less on everything else.
- 31% said they’d put themselves further into debt
- 37% stopped saving money
- 37% stopped paying off debt
- 44% made major budget cuts
- 41% reduced non-child related household expenses, like
eliminating gym memberships or cutting the cord on cable
What can parents do to reduce the cost of care?
While 73% of parents found child care costs were more than they
expected, there are several ways to mitigate the costs.
- Do their research. Once families know how much they can afford,
they can pinpoint the most feasible child care option by
researching current rates in their areas with free interactive
tools like babysitter rates and nanny tax calculators.
- A Flexible Spending Account (FSA) is offered by most employers,
which can include up to $5,000 before taxes and covers daycare,
preschool, and nannies, ultimately helping families save up to
$2,300 per year. Yet, the survey found only 1 in 4 parents actually
contribute to one.
- Ask their employer for subsidized child care benefits. A small
but growing number of employers have also begun to offer subsidized
child care options, including backup care, which allow parents to
be present and productive at work while knowing their children’s
care needs are met.
- Take advantage of tax breaks made available to them by paying
their caregiver above board. Beyond giving caregivers access to
professional benefits, like Social Security and Workers’
Compensation, families can utilize the Child and Dependent Care Tax
Credit when paying their caregiver legally. The tax credit can help
save $600 for families with one child and $1,200 for families with
two or more children. The bad news? Only 35% of parents claim it
when filing their federal income tax return at the end of the
year.
About the Care.com 2019 Cost of Care Data
The Cost of Care survey is an annual survey to measure the
relative cost of child care in the U.S. and how care impacts
families’ budgets and employment. The Care.com 2019 Cost of Care
survey captured responses from 4,146 parents in the United States
during the month of April 2019. Respondents were recruited from
Care.com.
Weekly rates for a nanny and after-school sitter are based on
Care.com 2018 member data, child care center and family care center
rates are based on rate information from centers listed on
Care.com, and au pair rates, which are based on data from Cultural
Care Au Pair, Au Pair in America, and Au Pair Care. Affordability
rankings are calculated based on the average cost of care in
relation to the U.S. Census Bureau’s 2016 American Community Survey
that includes the state median family income of households with
children.
For more information about the survey, sources or to learn
helpful tips on saving, visit Care.com/costofcare. Employers
interested in learning how to best support their working families
can visit care.com/careatwork.
About Care.com
Since launching in 2007, Care.com (NYSE: CRCM) has been
committed to solving the complex care challenges that impact
families, caregivers, employers, and care service companies. Today,
Care.com is the world’s largest online destination for finding and
managing family care, with 19.1 million families and 13.9 million
caregivers* across more than 20 countries, including the U.S., UK,
Canada and parts of Western Europe, and approximately 1.7 million
employees of corporate clients having access to our services.
Spanning child care to senior care, pet care, housekeeping and
more, Care.com provides a sweeping array of services for families
and caregivers to find, manage and pay for care or find employment.
These include: a comprehensive suite of safety tools and resources
members may use to help make more informed hiring decisions - such
as third-party background check services, monitored messaging, and
tips on hiring best practices; easy ways for caregivers to be paid
online or via mobile app; and Care.com Benefits, including the
household payroll and tax services provided by Care.com HomePay and
the Care Benefit Bucks program, a peer-to-peer pooled, portable
benefits platform funded by household employer contributions which
provides caregivers access to professional benefits. For enterprise
clients, Care.com builds customized benefits packages covering
child care, back up care and senior care consulting services
through its Care@Work business, and serves care businesses with
marketing and recruiting support. Headquartered in Waltham,
Massachusetts, Care.com has offices in Berlin, Austin and the San
Francisco Bay area.
*As of March 2019
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190716005144/en/
Natasha Gavilanez Senior PR Associate
natasha.gavilanez@care.com
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